Christchurch Airport reports $19.6M profit

Despite difficult trading conditions, Christchurch International Airport Limited (CIAL) has reported a net profit after tax of $19.6 million for the year ended 30 June 2012.

This result was a reflection of very satisfactory returns from the company’s commercial operations.

The reported profit also includes a net after tax gain on the revaluation of the company’s investment property portfolio of $4.1m. Excluding the impact of this revaluation gain, CIAL’s operating profit after tax of $15.5m was 30% ahead of budgeted expectations.

CIAL has declared a final dividend for the year of 7.65 cents per share, bringing the total dividend for the year to 15.15 cents or $8.73 million.

Addressing the company’s AGM this evening, CIAL Chief Executive Jim Boult said the events of the past two years have inevitably taken a toll on passenger numbers. Compared to the year ended June 30 2010, the last full financial year before earthquakes, CIAL has lost 448,814 passengers.

The loss of 7.5% of CIAL’s passenger base since the 2010 financial year has cost the company revenue from a number of sources associated with passenger throughput, in particular terminal concessions and car parking.

The company’s operational costs are higher as a result of the earthquakes, including thorough testing of every building on campus. In all, earthquake related issues have cost the company approximately $15 million at the EBITDA level in the 2012 financial year.

Mr Boult told shareholders the current year was always going to see a drop in profitability for the company, because of costs involved in financing the new terminal construction. Prior to the 2012 financial year, the cost of funds had been capitalised against the project. The Integrated Terminal Project accounted for $28.2M of the company’s total capital expenditure of $63M. The development is due to be completed March 2013 and to come in within one to two per cent of the budget set in 2008.

The past financial year also saw the acquisition and successful integration and operation of the International Antarctic Centre with the business performing ahead of expectations.

The company’s commercial opportunities and property developments continued to perform strongly. Highlights included the completion of the Temporary Office Park housing five short-term tenants, substantial completion of buildings for Hewlett Park and Landpower in Dakota Park and the construction of a McDonald’s restaurant. Planning approval was also secured for the Spitfire Square retail development. Last week , Gen-i also announced it will partner with CIAL on its new data centre.

Mr Boult said CIAL’s greatest contribution to the redevelopment of Christchurch will be through the retention and growth of aeronautical service to the city. He says the company is in discussions with a number of airlines, both existing and new, on potential new services.

He pointed to the recently announced new International Air Transport Policy Statement as a boost to those discussions.

"The new statement gives favourable consideration to airlines offering new services to and from Christchurch, to assist with the region’s recovery. That aspect alone effectively creates ‘Open Skies’ over Christchurch until 2017 and is invaluable for the South Island.

"It means any airline can take advantage of this especially supportive policy to bring the world’s travellers here - and is good news for exporters and importers as well."